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On the estimation of hospital cost: the approach

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  • Kurup, Hari K K
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    Abstract

    There has been a huge interest during the last decade on modelling hospital cost. Now that there is a fare amount of clarity achieved in estimating cost functions of hospitals, it is time to take stock of the existing methodologies. This article through a brief review of the past studies attempts to bring to light the issues and methodology related to cost estimation in health care provision, keeping in mind the increasing interest towards health insurance in developing countries. These include problems related to output measurement, definition of input prices and definition of cost and its components. The focus of the review is more on the statistical cost functions than on the accounting based cost calculations.

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    File URL: http://mpra.ub.uni-muenchen.de/22767/
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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 22767.

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    Date of creation: 18 May 2010
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    Handle: RePEc:pra:mprapa:22767

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    Keywords: hospital cost; cost estimation; multiproduct analysis;

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    1. Friedman, Bernard & Pauly, Mark, 1981. "Cost Functions for a Service Firm with Variable Quality and Stochastic Demand: The Case of Hospitals," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 620-24, November.
    2. Gaynor, Martin & Anderson, Gerard F., 1995. "Uncertain demand, the structure of hospital costs, and the cost of empty hospital beds," Journal of Health Economics, Elsevier, vol. 14(3), pages 291-317, August.
    3. Gertler, Paul J & Waldman, Donald M, 1992. "Quality-Adjusted Cost Functions and Policy Evaluation in the Nursing Home Industry," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 100(6), pages 1232-56, December.
    4. Breyer, Friedrich, 1987. "The specification of a hospital cost function : A comment on the recent literature," Journal of Health Economics, Elsevier, vol. 6(2), pages 147-157, June.
    5. Fournier, Gary M & Mitchell, Jean M, 1992. "Hospital Costs and Competition for Services: A Multiproduct Analysis," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 627-34, November.
    6. Vitaliano, Donald F., 1987. "On the estimation of hospital cost functions," Journal of Health Economics, Elsevier, vol. 6(4), pages 305-318, December.
    7. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (II): Applications of the Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, McMaster University Archive for the History of Economic Thought, volume 2, number fuss1978a.
    8. Grannemann, Thomas W. & Brown, Randall S. & Pauly, Mark V., 1986. "Estimating hospital costs : A multiple-output analysis," Journal of Health Economics, Elsevier, vol. 5(2), pages 107-127, June.
    9. Hughes, David & McGuire, Alistair, 2003. "Stochastic demand, production responses and hospital costs," Journal of Health Economics, Elsevier, vol. 22(6), pages 999-1010, November.
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